4/23/2008 @ 8:20PM

Apple's Open Secret

By sticking with its promise to sell 10 million iPhones in 2008 on a call with analysts Wednesday–even as it announced sales of just 1.7 million handsets during the current quarter–the secretive Cupertino, Calif.-based computer and gadget maker made it plain that it’s about to overhaul its iPhone lineup.

The renewed promises that Apple
will sell 10 million phones this year came as the company said Wednesday its earnings for the quarter ending in March jumped 37%, thanks to a 51% surge in unit sales of desktop and laptop computers. (See: “Mac Attack Beats Street.”)

The real action, however, came not as Apple detailed its numbers, but as Apple Chief Operating Officer
Tim
Cook
Tim Cook
and Chief Financial Officer
Peter
Oppenheimer
Peter Oppenheimer
dodged efforts to smoke out details on Apple’s new phone.

Analyst Shannon Cross of Cross Research took the prize for the boldest gambit, asking if Apple will still sell the current-model iPhone once it rolls out an iPhone able to work on high-speed so-called “3G” networks.

“Can you comment on the availability of the 2.5G iPhone once the new 3G iPhone is out?” Cross asked.

“We don’t comment on new products, sorry,” Cook said, laughing.

“We’ve got to try sometimes,” Cross shot back.

You can’t blame Cross after Cook explained that supplies of Apple’s iPhone have been running low because Apple sold more phones during its latest quarter–1.7 million–than it had expected. That rate adds up to just 6.8 million phones over the course of a year. Obviously, Apple plans to pick up the pace.

“We can’t comment on new products,” Cook said (again), when asked what role the 3G phone will play in hitting Apple’s sales targets. “But I will reiterate we are confirming that we will hit sales of 10 million iPhones, and obviously part of that is rolling out to more geographies.”

And the other part, just as obviously, will be new phones. And that’s merely the latest hint: Late last year,
AT&T
Chief Executive
Randall
Stephenson
Randall Stephenson
promised that a 3G iPhone was on the way.

After the call, Cross said she’s so sure a new iPhone is coming that she’s betting Apple will sell 13 million phones this year. The most likely release date is June 9, when Apple kicks off its annual Worldwide Developers Conference and rolls out new iPhone software, Cross says. Her biggest question: the fate of today’s model. “There will probably be some form of a tier pricing [system]–do they take the 2.5G as a lower-priced option or not?”

The real mystery at Apple then, is what exactly will the computer maker do with P.A. Semi–a small, fabless chip designer chock full of microprocessor-design talent. In response to questions from Forbes.com, Apple confirmed late Tuesday it had acquired the company. (See: “Apple Buys Chip Designer.”)

Apple refused to detail its plans for analysts. “We buy smaller technology companies from time to time, and we don’t have a practice of commenting on our purposes or plans,” Oppenheimer said in response to a question from Shaw Wu, an analyst at American Technology Research. “So I can’t comment on that.”